DOGM Conducts State Coal, Gas Conference

The Utah Division of Oil, Gas and Mining conducted a state coal industry conference and field trip last Thursday and Friday in Price. Attendees included government employees and energy company representatives all in the same room at the same time.

"Coal is important to the economics of Carbon and Emery counties as well as the state of Utah," said DOGM director Lowell Braxton. "We think it's important that the coal industry meet in this type of setting and have the opportunity to discuss the future of the industry, as well as get updates on new rules and regulations that effect how they do business."

After admitting that he hasn't been psychoanalyzed recently, Barker described AmWest's interest in producing coal at Willow Creek and using the facilities to help Utah Railway haul additional coal.

Utah Railway is a sister company with exclusive rights to haul the Willow Creek coal.

"We are looking at Willow Creek and that is all it is - a look," said Barker. AmWest has an option with RAG to eventually break the seal, turn the fans on and see what is happening in the mine and, "then we will make a decision."

"We feel it can be a successful if operated as a room and pillar mine," added Barker. "It includes a sizable reserve that is close to our railroad and we feel it can be mined safely, but we are just looking right now."

Barker explained that if the company does decide to open Willow Creek, it will be run as a mine with permanent employees.

"There is a long list of potential items to stop the venture, but we feel it is worth taking a look at," concluded Barker.

Utah Railway spent close to $2 million in track and other improvements in the loadout facility area.

Ernie Wessman, PacifiCorp, addressed the crowd about the questions surrounding new power generation plants in Utah.

Wessman explained that the availability of coal and the power plant in Castle Dale was designed for a fourth unit are important items. But there were other issues at stake that is making the decision a hard one.

The first matter deals with air quality.

The present regulations indicate that if a fourth unit is constructed, all power plants combined would be permitted at the level of today.

So additional air quality controls would have to be installed on the other three units to lower emissions so that a fourth unit could be installed.

Also, today the company as a whole would help pay for the project whether it be in Emery county or in Oregon.

But new laws are being passed that would allow regionalization of the company and the financial obligations it takes on.

Wessman pointed out that, if it ended up being just the consumers in Utah who could pay for the new plant, there would be problems.

Wessman also stated that rates are much more stable today than a year ago and it is getting harder and harder to fit the payoff with the cost of the new plant.

In May 2000, the company's rates were at $50 per megawatt hour. The prices peaked at $500 and now are back down to $60.

Already, new gas fired plants are being installed and wind generation plants are being constructed.

Conservation has also made a big impact and the need to build a huge coal fired plant.

So for the time being, no decision has been made on whether PacifiCorp will construct Hunter four unit.

Last Friday's conference session included a field trip to see about 3,000 feet of the right fork of the White River channel that is being relocated. The project will protect the road leading into the Ashley National Forest, reduce sedimentation and improve fish habitat.

Coal reserves in Carbon and Emery County were of major interest to those who attended the forum.

Reserves were defined as virgin and or accessed parts of a coal reserve base, which could be economically extracted or produced after considering environmental, legal and technologic constraints.

Reserves include only the recoverable coal.

The following information includes the name of the reserve, the original amount of coal and what remains at the locations:

Coal quality that deals with sulfur, ash and heating value as well as market conditions and transportation costs are factors.

Company reserve estimates according to state records are as follows:

Canyon Fuel, 232,000,000.

Consol, 28,000,000.

Lodestar, 8,000,000.

PacifiCorp, 82,000,000.

RAG (Cyprus), 105,000,000.

Other (Andalex, ANR, Lila Canyon), 129,000,000.

Total, 584,000,000.

Total production from 1879 to 1997 was .7 billion tons of coal. It was noted that published reserve estimates do not reflect the reality of the coal markets in Utah as declared by companies and expected by government.

Although central Utah coal production trends have doubled since 1983 the price of coal has gone from a high of just under $30 to a current $18. Coal mines are mining more coal for less money and therefore able to stay in business although productivity in the mine is expected to level off after a continual improvement since 1981.

Conclusions drawn were that the most favorable coal deposits in central Utah have been mined and without price increases, remaining resources will have trouble competing in Western coal markets.

"It will be a real battle to compete if the price of coal does not rise," Jim Kohler, BLM official.

Sue Nava gave a report about the ongoing seismic measurement program near Joe's Valley Dam. She hopes the data collected will help determine how close to the dam coal production can occur. Data is being produced from 12 different seismic stations measuring bumps and earth trembling. Between December and March of this year there were 1,870 measurable events, the highest being 1.8 on the Richter scale. Most are less than .5 and are tied in with mining events.

Data will be released at a future date.

Ken Defa of the Co-op mine gave a report on the new mobile roof machines they are using instead of so much pillar support. The portable, motorized shields allow crews to continue production without having to stop to set timbers. They also allow for more of the coal to be mined.

Formerly crews would place 70 timbers and 60 roof bolts per pillar. With the use of the mobile roof support machine they now install eight timbers and no roof bolts per pillar.

Chris Hansen, Canyon Fuel Company talked about the pros and cons of paperless permitting processes now available. He pointed out the savings in time as well as money and space needed to store all the volumes needed to operate a mine. Now that information can be downloaded to a CD and is internet assessable.

Which poses the other problem of having too much information available that when used out of context creates problems.

Elaine Zieroth of the Forest Service talked about the Drunkards Wash unit of the gas field located around Price and to the south that was opened up by River Gas and now is owned by Phillips Petroleum.

The field began in 1991 and started with three wells, 15 the next year and 20 the following. An EIS was started in 1994 and completed in 1997.

There are now 435 wells located in the field which is nearing completion at the 160 acre spacing. They range from 1,500 to 4,000 feet deep and produce an average of 500 million cubic feet of gas per day per well and expected to have a 20 year life.